IT’S NOT A TAX BREAK! Education settings are exempt!

[LaceyLou82]

Fed up of Labour calling the VAT on fees a tax break! Ideologically this is so very unsound, we are talking about providing an education here.

Education is not taxed for a reason, in this country it should be a fundamental right.

As a nation vs the global competition we have this is totally a backwards step.

He could put 10p on income tax and raise billions!!! Foolish policy.

Such a misconception about Private School parents. This is an unfair policy.

10% on income tax! So, costing every working age adult an extra £300 per month.

You're on a cloud if you think people would vote for that above VAT on private schooling costs.

I won’t need to work if I’m not paying fees by business and I paid over £100k in tax last year alone!

So you earn more than £250k per year? Take home more than £12k per month? But don't want to pay another £250 per month in fees and instead expect all other workers to pay £300 a month more in tax?

Pull the other one. It's got bells on it.

They can't reclaim VAT because they can't charge VAT.

Exactly. It's irrelevant to the lives of most of the electorate but to read Mumsnet you'd actually think it mattered to more people than it really does.

It is a tax break. Ideologically it is perfectly acceptable to limit the tax break to only state education going forward as this is sufficient to meet the fundamental right, when the electorate gives you a mandate to do this.

Just the same as if Starmer turned round and said that he wanted to change the parameters of VAT in any other area (food, other services etc), if this is part of his mandate and he has been elected he is able to do it. Plus do you think that they won’t have modelled the effects at all- the state sector is more than likely to be able to accommodate the extra pupils and I think the current plan is to provide for an exception for some SEN pupils.

Honestly though I would have much more respect for parents if they were just honest and said they were a bit pissed off about having to shell out for it rather than relying on very shaky self-serving academic justifications.

I think she's referring to the combined tax payments of her business and her personal income. So if you include VAT payments (you shouldn't, but it's an easy way to pad out the figure) in the tax total alongside corporation tax and the tax on her salary/dividends it's a business around £500k turnover.

Not income tax! That’s not the only tax that exists.

Corporation tax, my employee’s and my NI, dividend tax, and then my personal income tax!

Oh and VAT!

Quite. Cry me a river!

No. Private schools can’t reclaim input VAT at the moment. State schools can. Private schools are already at a disadvantage where VAT is concerned.

And if you can’t afford the new rates, you’ll have to go without something else. Like state school parents are often told. It just has to be a priority you see. Nothing to do with your income. You just have to care enough..

I agree @LaceyLou82 . What’s even more annoying is that they keep referring to it as a tax break for schools. It isn’t the schools who’ll be paying the VAT; it’s the parents.

Just wondering ...I don’t have kids so no affect to me directly either way and I no longer work full-time in schools (I just deliver workshops in both private and state schools) but are they going to put VAT on other educational things like tutoring groups or tutoring agencies etc , that is of course unless they already do?

We will be in a position where education is subject to VAT, but caviar and chocolate body paint are tax free!

Is it your business or are you talking about a company you work for?

No one really knows. They’ve only announced that it’s going on school fees. The problem with that is trying to draft the legislation so that it doesn’t inadvertently end up catching other things, but also it’s a slippery slope. It paves the way for other VAT changes (universities, health care, care homes, private nurseries etc).

It depends, the current VAT exemption for private tuition provided by a sole proprietor or partner isn't necessarily affected. The devil will be in the detail though.
https://www.gov.uk/guidance/vat-on-education-and-vocational-training-notice-70130

What does concern me is the impact this may have on specialist private education for SEN children (which may or may not be part funded by the local authority) and also on specialist music/dance provision part funded on a sliding scale by the government MDS and DaDa scheme. Putting VAT onto school & college fees for those schools will mean that access to specialist education will become based on money rather than talent/potential.

Also I used to run kids drama classes and the number students I had meant that we were over the VAT threshold. Taxing education could mean that out of school activities provided by larger organisations become unaffordable for ordinary families.

The reason education is exempt across the board is because when charity law was being formulated in the era of Elizabeth THE FIRST there was no state education, schools were either church schools for those training to enter the church, or random rich people would set up grammar schools (ie, they taught grammar to boys whose parents couldn't afford a private tutor so they could have a career in trade) as a charitable venture.

I don't think it's unreasonable to update the law after 423 years - the situation has changed somewhat and we no longer need privately run schools.

The agencies would need to be fairly big to need to register for VAT. As of 1st April this year, businesses only need to charge VAT if they have VATable revenue of £90,000 or more in a year.

The VAT position has absolutely nothing to do with charitable status. Around half of private schools don’t have charitable status. Fees are exempt from VAT because of an exemption in the VAT legislation. It’s actually against EU law to tax education, so the only reason we can do it is because of Brexit. The VAT position has absolutely nothing to do with Elizabeth I!

I was a sole trader who ran dance/drama singing classes for 3 hours on a Friday night and all day on a Saturday with approx 6 members of staff and we were over the VAT threshold.

There are ballet schools that run classes every night of the week plus Saturdays with hundreds of kids taking multiple classes coming through the doors each week.

My business.

See also, the many “loopholes” referred to that are actually reliefs that are designed and written on purpose to be used, not some esoteric quirk that allows people to save tax by the back door.

For most people, 20% on school fees would be less than 10% on their income tax (even if you’re earning £50k), so it seems a very silly policy to increase the tax burden on those who can afford private schools as well as those who can’t… and by more than the VAT cost would’ve been too…

I hate private education as a principle so anything that curtails it is good in my opinion. If private schools have to cut teachers’ wages below state school levels in order to afford pupil fee reductions then that will help encourage state school teachers to stick it out in the public sector.

A good thing.

Bad luck Op Outside MN I think the voting population is against you.

A business in which you employ people and only run to pay school fees. A business you would close if you had no fees to pay.

Really?

You don't sound as though you'll struggle to pay the Vat on your school fees.